Pragati Construction Co. vs Dda & Anr.
2013 Latest Caselaw 404 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                     DECIDED ON: 29.01.2013

+                             LPA 763/2003

      PRAGATI CONSTRUCTION CO.                            ..... Appellant
             Through : Mr. N.K. Kantawala with Mr. Amit P. Deshpande,
                       Advocate
                                    Vs.
      D.D.A. & Anr.                                      ..... Respondents

Through : Mr. Ajay Verma, Advocate for DDA.

                              LPA 764/2003

      PRAGATI CONSTRUCTION CO.                           .... Appellant

Through : Mr. N.K. Kantawala with Mr. Amit P. Deshpande, Advocate Vs.

UOI & Ors. ..... Respondents Through : Mr. Ajay Verma, Advocate for DDA.

CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE SUDERSHAN KUMAR MISRA MR. JUSTICE S.RAVINDRA BHAT (OPEN COURT)

% The Appellant was successful in its bid at a public auction by the Delhi Development Authority (DDA) for plot No.6, Nehru Place, New Delhi. The Appellant's bid was confirmed on 21-8-1980.

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2. One of the auction conditions related to payment of ground rent; its terms were that for the first two years, such rent was Re.1/- per annum and subsequently, it was to be at 2.5% of the premium amount. The Appellant approached this Court in 1989 (WP 1412/89) complaining that the term obliging to payment of ground rent was arbitrary, alleging that the respondent had decided that for the first five years, the ground rent payable was Re 1/- and not only for the first two years of the lease term. That writ petition was rejected on 21.11.1989.

3. The petitioner's default in payment of the amounts due and the delay resulted in issue of a demand, by the Assistant Collector, in terms of Section 68 of the Punjab Land Revenue Act, 1887. The petitioner felt aggrieved by that demand and filed another writ petition (WP 1300/92) before this Court. This Court dismissed the said petition on 27-4-1992, observing as follows:

"Under Section 40A of the Delhi Development Act, 1957, any amount due to DDA can be recovered as arrears of land revenue if no other mode is specifically prescribed for the purpose. It is not disputed that the arrears of ground rent and the interest accruing thereon are recoverable, as arrears of land revenue. Under Section 5 of the Revenue Recovery Act, DDA could request the. Collector of the District for. recovery of the amount due to it as if it was an arrear of land revenue. Then the mode of recovery has to be exercised under the provisions of the Punjab Land Revenue Act, 1887, as extended to Delhi. For the time being only a notice of demand has been raised .For the purposes of this petition, it is not disputed before us that the amount as contained in the notice is not due to the DDA. The petitioner cannot sit over such a huge amount when particularly he must have recovered the same from the buyers of the flats and utilised the money for his own benefit .In spite of our specific order the petitioner did not file all the correspondence

LPA 763-64/2003 Page 2 leading to his payment of ground rent and interest thereon. Rather he filed an affidavit that this Court directed him to give particulars of the correspondence only after 1989. This is not correct. With such a conduct of the petitioner we would not like to interfere in exercise of our jurisdiction under Article 226 of the Constitution. The petition is, Therefore, dismissed in limine.."

4. The appellant then approached the Collector (Nazul), questioning the demand made by the Assistant Collector. It also urged - before the Collector, that it could not be held responsible for the default of the owner/allottees to whom it (the Appellant) had sold the flats, after developing the lands. The Collector, by order dated 21-09-1992, even while rejecting the appeal, directed that the recovery certificate issued (against the appellant) be enforced subject to its furnishing a list of defaulters within 10 days, and further certifying that no ground rent had been paid by such defaulters, in which event the said flat owners could be proceeded with directly. In the other eventuality (of the appellant not furnishing the certificate) the amounts could be recovered from it. The appellant then approached the Financial Commissioner, in a further appeal. The Financial Commissioner by his order reduced the demand, by reducing the rate of interest (on the unpaid amounts) from 10% p.a. to 6 % p.a. and also holding that the appellant was liable to pay ground rent at increased rate (2.5% of the lease premium, per annum) only after the five year term. The DDA challenged the order of the Financial Commissioner in WP 1410/1993. The Petitioner filed WP 7854/2001, questioning a demand letter dated 18th December 2001 demanding arrears of ground rent.

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5. The DDA's earlier petition (WP 1410/1993) was allowed by the judgment of the learned single judge dated 8th September 2003; it was held that in view of the previous decisions of the Division Bench in (WP 1412/89) the plea of the petitioners' liability arising after five years initial period could not have been a valid ground for the Financial Commissioner to limit the demand. The Appellant's grievance in respect of the demand of 2001, was upheld to a limited extent, and it was held that the DDA had to verify the amounts deposited by it (the appellant) and recover the balance unpaid amounts.

6. The Appellant's grievance in LPA No.764/2003 is in respect of the order of the Single Judge in WP No.7854/2001; its grievance in LPA No.763/2003 is as regards correctness of the Single Judge's order allowing the DDA's petition (WP 1410/193). In both appeals, the correctness of the impugned judgments have been questioned, both as to the liability sought to be fastened in respect of the defaulters' (flat allottees') liabilities, as well as to whether the initial lease term for payment of the nominal lease rent of Rs. 1/- was 2 years or 5 years. The last issue canvassed is the rate of interest i.e. whether it was 6% p.a. or 10% (the latter rate being upheld by the impugned judgment).

7. This Court notices that the questions sought to be urged have now been fully decided by another Division Bench of this Court, in another of the Appellant's cases, i.e. Pragati Construction Company (Partnership firm) vs. Delhi Development Authority 128 (2006) DLT 199, where it was held that:

LPA 763-64/2003 Page 4 "9. Having heard learned counsel for the parties, we are of the view that there is no merit in this appeal. It is quite clear that the responsibility of payment of ground rent to the DDA rests entirely on the Appellant. Although the Appellant may have some sort of an arrangement for payment of ground rent with the sub-lessees/occupants of the multi story building, it cannot shirk its responsibility of payment on the specious plea that it was not receiving any amounts from the sub-lessees/occupants. What amount the Appellant receives from the sub- lessees/occupants is an internal arrangement between them and it does not concern the DDA at all, which is entitled to receive ground rent from the Appellant.

................. ..................

13. For the foregoing reasons, we do not find any error having been committed by the learned Single Judge in rejecting the claim of the Appellant seeking to avoid its liability of payment of ground rent."

So far as the question of the rate of ground rent is concerned, this Court is of opinion that the appellant cannot now legitimately canvass the issue, having suffered an adverse order in that regard in WP 1412/1989. Similarly, the question of rate of interest was, in the opinion of this Court, correctly decided by the learned Single Judge, who noticed that 6% p.a. was applicable for interest on advances and not on default in payment of arrears of ground rent, as in this case. This Court is of opinion that the only relief which can be granted to the Appellant is in tune with Pragati Construction Company (the last judgment of the Division Bench, noticed earlier) where it was directed as follows:

"14. In so far as the directions given by the learned Single Judge are concerned, we find them to be eminently reasonable.

All that has been directed by the learned Single Judge is that

LPA 763-64/2003 Page 5 the DDA would tabulate the payments received by it either from the Appellant or from the sub-lessees/occupants of the multi story building and give the benefit of these receipts to the Appellant. The Appellant has also been given an opportunity to compute the payments made by it or by the sub-

lessees/occupants of the multi story building to the DDA and claim credit thereof. After reconciliation of the accounts, the Appellant has been directed to make the payment to the DDA and if there is any dispute, the Assistant Collector has been directed to pass a speaking order which can be challenged by the Appellant by filing an appeal before the Collector (Nazul)."

8. Counsel for the parties did not dispute that the controversy in the above case is identical with that in the present appeal; even the appellant is the same. They also did not dispute that the directions quoted above can be applied in the facts and circumstances of this case, too. Accordingly, the DDA is directed to comply with Para 14 of the judgment in Pragati Construction Company 128 (2006) DLT 199) referred to above.

9. The appeals, LPA No.763/2003 and LPA No.764/2003 are disposed of in the above terms. No costs.

S. RAVINDRA BHAT (JUDGE)

SUDERSHAN KUMAR MISRA (JUDGE)

JANUARY 29, 2013

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